Has anyone taken note of the recent proliferation of
novels written in the genre of post-apocalyptic fiction? Apparently, the U.S. government has. On October 13, 2016, President Barrack Obama issued an executive order aimed at preparing the nation’s
infrastructure for space weather events that could potentially wreak havoc on
society as a whole.
But what are space weather events? Space weather events are normally thought to
include solar flares, solar energetic particles and geomagnetic disturbances
to mention a few. These space weather
events according to NASA and echoed in President Obama’s recent executive order
occur regularly with some measureable effects on critical infrastructure
systems and technologies, such as global positioning systems (GPS), satellite
operations and communications, aviation, and the electrical power grid. Extreme space weather events – those that
could significantly degrade or entirely destroy critical infrastructure – could
disable large portions of the electrical power grid resulting in cascading
failures that would affect key services such as water and food supply,
healthcare, transportation and even the financial system.
As noted in President Obama’s October 13, 2016 executive
order, the key to staving off the effects of extreme space weather events would
be the state of national preparedness for such events. In this regard, the recent executive order
indicates that successfully preparing for space weather events is an
all-of-nation endeavor that requires partnership across governments, emergency
managers, academia, the media, the insurance industry, non-profits and the
private sector.
But has the insurance industry given much thought to preparing
for potentially societal disrupting events such as these? The quick and unfortunate answer appears to
be NO. If the insurance industry had
given any thought to preparedness for such space weather events, they would now
be including such space weather events in their general policy exclusions and
treating them much like the exclusions for “hostile or warlike action” or
“nuclear reaction, nuclear radiation or radioactive contamination.” In most
instances, property insurance policies specifically and unequivocally exclude
loss, damage or expense caused by or resulting from these perils regardless of
any other cause or event that contributes currently or in any sequence to such
loss or damage.
The obvious question is why should the insurance industry
treat “space weather events” with such absolute exclusion status? Well … because nothing is immune from such a
space weather event. First and foremost,
due to the interdependencies of modern society, the insurance industry could
face potential claims across all sectors of society including power generation,
transportation, financial services, agricultural, communications and the list
goes on and on.
Additionally, the potential loss or damage from space
weather events could range from no physical loss or damage to complete societal
breakdown. So, the only logical way for
the insurance industry to prepare is to exclude such space weather events from
all aspects of insurance coverage.
With that said, if no such all-encompassing exclusion is
added to current insurance policies, what could the insurance industry
anticipate and how would it respond to such an event? In a worst case scenario, no one need worry
because life on Earth would cease to exist.
In a less extreme example, such as a super solar flare or extreme
geomagnetic storm, society would likely face a loss of the electric power grid
for some unforeseen period of time. In
this situation, there would likely be covered physical loss or damage to which
most property insurance policies would respond.
There is also the potential for such space weather events to produce an
electromagnetic pulse (EMP), which could cause the loss of most unhardened
electrical systems and components. Or,
during a geomagnetic storm, induced ground currents could potentially melt
copper windings of transformers, crippling the power grid. And, as you undoubtedly recall from the
massive power outage on August 14, 2003, our national power grids are more
vulnerable than people want to contemplate.
The loss of our national power grids, however, is only the
tip of the iceberg. The loss of the
power grid as result of a space weather event with resulting EMP effects could
potentially devastate all sectors of society because of the interdependencies
of modern social infrastructure. If the
power grid was lost from EMP resulting from a space weather event, one could
reasonably anticipate the almost immediate loss of transportation; fresh water;
food and medicine with no means of transport for resupply; communications and
an inability to produce or supply fuel.
In such a situation, it is not difficult to foresee a complete collapse
of the financial and monetary systems either.
For example, an EMP from a space weather event could not only destroy the
ability to electronically transfer funds, but also prevent access to electronic
financial records. On a more personal
level, people would not have access to funds through banks or ATMs, potentially
leading to a collapse of the monetary system.
Any local trade would likely be through barter or perhaps the new
currency would be … ammunition! As these
few examples demonstrate, the financial and social effect of a space weather
event could be incalculable.
But what if you wanted to make an insurance claim from
such an event? The first thought that
occurred to me was how … there is no electricity or operating financial
system. Obviously, any response from the
insurance industry would depend on the severity of such a space weather event
and its resultant effects. The above
examples may seem far-fetched but are simply used to illustrate the potential
difficulties the insurance industry could face from a space weather event.
Consequently, the insurance industry faces a host of
problems in even considering President Obama’s call to arms in preparing the
nation for space weather events. In a
utopian world, the insurance industry could potentially assist in shouldering a
portion of the burden of recovering from such a space weather event … but would
the insurance industry exist afterwards?
Who knows? However, in the real
world, and in light of the potential broad spectrum impact on society from a
space weather event, the insurance industry should use foresight instead of
hindsight and begin excluding such space weather events for all facets of
insurance coverage.
Posted by William Zieden-Weber
Credit: Science@NASA
